Investment adviser betrayed clients, jury told

March 4, 2013|By Jon Burstein, Sun Sentinel

George Elia was more than an investment adviser to many of his clients, he was their friend.

That's what made it all the more devastating when his carefully crafted image as a successful investor was exposed as a lie, said a federal prosecutor as Elia's fraud trial got under way Monday morning.

Elia, 69, took in nearly $10 million from more than 40 clients, using much of that money to support his own lavish lifestyle and pay a co-conspirator to recruit members of the Wilton Manors gay community to invest, said Assistant U.S. Attorney Wilfredo Fernandez. The prosecutor said some clients entrusted their life's savings with Elia.

"The money was not being invested," Fernandez told a Miami federal jury. "There was no real investment strategy."

Elia, of Fort Lauderdale, faces nine counts of fraud and a count of conspiracy to commit fraud. A conviction of just one of the fraud charges could leave him facing a prison sentence of up to 20 years.

Lined up to testify against Elia are not only some of his investors, but also the Wilton Manors man who admits acting as Elia's pitch man in the gay community, James F. "Jim" Ellis.

Ellis, 69, pleaded guilty last month to a single count of conspiracy to commit mail and wire fraud, admitting he pocketed more than $2.9 million of investors' money. He faces up to five years in prison when he is sentenced next month.

Elia's defense strategy remained unclear Monday with his attorney, Stephen H. Rosen, reserving his opening statement until later in the trial. Rosen had argued at an August hearing that many day traders like Elia "took a bath" in the recent recession.

Before jury selection began Monday, Rosen had sought to ask prospective jurors about their sexual orientation, but that question never came up. U.S. District Judge Kathleen Williams asked a general question if any of the prospective jurors would be unable to be fair to homosexuals and no one responded.

Fernandez said Elia would take the time to get to know his clients personally, sharing meals with them and inviting them over to his house. Among Elia's alleged victims are a brain surgeon, a real estate developer and a nightclub owner.

Elia is accused of using investors' money to buy luxury cars, jewelry and trips. Court records show at least $2.5 million flowed into companies controlled by Elia and/or his wife.

After some investors began suspecting Elia of fraud, he abruptly sold his house in January 2012 and left for Cyprus, where he was born. He appeared out of the reach of law enforcement and investors until he and his wife flew back to Las Vegas last March, where he was arrested.